The Likud members went along without much argument, as the fireworks expected to mark the final days of the outgoing Labor-Likud unity government on this issue failed to materialize.

Peres acknowledged that Israel and Egypt maintain opposite views of the Palestine National Council meeting last week.

Cairo insists that the Palestine Liberation Organization has fulfilled the conditions for participation in the peace process, by accepting U.N. Security Council Resolutions 242 and 338 that imply recognition of Israel.

The Israelis contend it did no such thing.

Nevertheless, Peres told his fellow ministers, the Egyptians have behaved in a restrained manner in the way they explained their motives for recognizing Arafat’s state, and in their efforts to avoid further deterioration of relations with Israel.

Israel, he proposed, should exercise the same kind of restraint. It should not take retaliatory measures, such as refusing to hand over the Taba area to Egypt as required by international arbitration, he said.

None of the Likud ministers objected.

Peres said Israel’s main diplomatic effort now is twofold: to prevent PLO chief Arafat from appearing before the U.N. General Assembly in New York next week and to block an expected U.N. resolution giving observer status to the newly proclainmed Palestinian state.

Peres said Arafat’s claim that he has obtained an American visa is false.